The Role of HRM in the Success of Organizational Restructuring
What is Organizational Restructuring?
Organizational restructuring is a strategic initiative undertaken to realign internal structures, roles, and processes in response to changing business environments, technological advancements, or new goals (Ganesan, 2025). It can involve altering hierarchies, redefining responsibilities, consolidating departments, or revising policies and procedures. Drivers of restructuring often include mergers and acquisitions, economic downturns, technological disruptions, or strategic shifts aimed at improving efficiency and competitiveness.
The Role of HR in Organizational Restructuring
While restructuring is often perceived as a financial or strategic exercise, its ultimate success depends heavily on people. Human Resource Management (HRM) plays a pivotal role in ensuring that employees adapt and contribute positively during transition. HR must balance organizational objectives with employee well-being, acting as the bridge between strategy and the workforce. HR’s key responsibilities in restructuring include:
- Strategic Communication: Clear, transparent communication to reduce uncertainty.
- Talent Management: Identifying and retaining key talent while reallocating roles effectively.
- Employee Support: Assisting those affected, including redundancy or redeployment.
- Change Management: Helping employees adapt to new systems and minimize resistance.
- Legal Compliance: Ensuring adherence to labour laws and regulations.
The Case of CEB Sri Lanka
The ongoing restructuring of the Ceylon Electricity Board
(CEB) illustrates how HR influences the success of large-scale
transformation.
Source : CEB Annual Report - 2023
1. Strategic Alignment and Communication
The government, under the Sri Lanka Electricity (Amendment) Act, No. 14 of 2025, announced plans to divide CEB into separate entities for generation, transmission, and distribution. The move was positioned as a strategy to increase efficiency and attract private investment (Infrastructure and Economic Development, 2025). However, unions raised concerns over job losses and privatization (By Maheesha Mudugamuwa, 2025). In such a context, HR’s role in transparent and consistent communication is vital to clarify intentions, address fears, and preserve workforce trust.
2. Talent Mapping, Redeployment, and Compensation
With a workforce exceeding 22,000, CEB faced the task of reallocating employees to new entities. Staff were asked to indicate placement preferences, while a Voluntary Retirement Scheme (VRS) offered compensation of up to Rs. 5 million for those unwilling to transfer (The Sunday Times, 2025). Designing equitable redeployment and compensation frameworks is critical to preventing workforce imbalances, dissatisfaction, strikes, and talent drain.
3. Change Management and Culture Building
Beyond structural changes, new organizational entities required fresh leadership models, performance systems, and workplace values. HR’s responsibility is to implement training programs, leadership development, and cultural integration initiatives. These efforts ensured employees are not alienated and that the new companies operated cohesively.
Conclusion
The organizational restructuring cannot succeed through
strategy and structure alone. It is the human factor how employees are
engaged, supported, and managed that determines success or failure. HRM serves
as the enabler of transformation, ensuring fairness, transparency, and
alignment between organizational goals and employee needs. Effective HR
interventions are the cornerstone of smooth, sustainable restructuring.
References
Barbados Employers' Confederation (2020) The role of HR in an
Organisational Restructure BEC ARTICLES. Available at: https://barbadosemployers.com/wp-content/uploads/2020/11/The_role_of_HR_in_an_organisational_restructure.pdf.
Ceylon Electricity Board (2024) Publications & and Media, Publications
& and Media. Available at: https://www.ceb.lk/publication-media/annual-reports/en
(Accessed: 29 September 2025).
Ganesan, K. (2025) Organizational restructuring: Definition, strategies
and top examples for leaders in 2024, CultureMonkey. Available at: https://www.culturemonkey.io/employee-engagement/organizational-restructuring/#organizational-restructuring-meaning
(Accessed: 29 September 2025).
Infrastructure and Economic Development (2025) CEB Restructuring: A
Turning Point for Sri Lanka’s Power Sector, Ceylon Public Affairs.
Available at: https://ceylonpublicaffairs.com/ceb-restructuring-sri-lanka-power-sector/?utm_source=chatgpt.com
(Accessed: 29 September 2025).
Maheesha Mudugamuwa (2025) CEB reforms: Govt. and workers lock horns
over restructure, Latest in the News Sphere | The Morning. Liberty
Publishers. Available at: https://www.themorning.lk/articles/SUXW1Xxh47SL10YdUC7M?utm_source=chatgpt.com
(Accessed: 29 September 2025).
The Sunday Times (2025) CEB restructuring: Employees
offered VRS compensation up to Rs. 5 million, Print Edition - The Sunday
Times, Sri Lanka. Available at: https://www.sundaytimes.lk/250831/news/ceb-restructuring-employees-offered-vrs-compensation-up-to-rs-5-million-610738.html?utm_source=chatgpt.com
(Accessed: 29 September 2025).
Conclusion
The organizational restructuring cannot succeed through strategy and structure alone. It is the human factor how employees are engaged, supported, and managed that determines success or failure. HRM serves as the enabler of transformation, ensuring fairness, transparency, and alignment between organizational goals and employee needs. Effective HR interventions are the cornerstone of smooth, sustainable restructuring.
References
Barbados Employers' Confederation (2020) The role of HR in an
Organisational Restructure BEC ARTICLES. Available at: https://barbadosemployers.com/wp-content/uploads/2020/11/The_role_of_HR_in_an_organisational_restructure.pdf.
Ceylon Electricity Board (2024) Publications & and Media, Publications
& and Media. Available at: https://www.ceb.lk/publication-media/annual-reports/en
(Accessed: 29 September 2025).
Ganesan, K. (2025) Organizational restructuring: Definition, strategies
and top examples for leaders in 2024, CultureMonkey. Available at: https://www.culturemonkey.io/employee-engagement/organizational-restructuring/#organizational-restructuring-meaning
(Accessed: 29 September 2025).
Infrastructure and Economic Development (2025) CEB Restructuring: A
Turning Point for Sri Lanka’s Power Sector, Ceylon Public Affairs.
Available at: https://ceylonpublicaffairs.com/ceb-restructuring-sri-lanka-power-sector/?utm_source=chatgpt.com
(Accessed: 29 September 2025).
Maheesha Mudugamuwa (2025) CEB reforms: Govt. and workers lock horns
over restructure, Latest in the News Sphere | The Morning. Liberty
Publishers. Available at: https://www.themorning.lk/articles/SUXW1Xxh47SL10YdUC7M?utm_source=chatgpt.com
(Accessed: 29 September 2025).
The Sunday Times (2025) CEB restructuring: Employees offered VRS compensation up to Rs. 5 million, Print Edition - The Sunday Times, Sri Lanka. Available at: https://www.sundaytimes.lk/250831/news/ceb-restructuring-employees-offered-vrs-compensation-up-to-rs-5-million-610738.html?utm_source=chatgpt.com (Accessed: 29 September 2025).
It seems good.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteCompletely agree with your article.As you mentioned restructuring is not just a strategical change, success of restructuring will depend on how employees are react on the transition.HR may have to convey restructuring process to employees transparently.As my point of view restructuring is the best decision for CEB. And HR may involve in restructuring by Separating several entities to increase productivity and introducing VRS scheme,reallocating employees by recognising their talents is appropriate.
ReplyDeleteOrganisational restructuring is commonly thought to be a strategic process that involves organisational realignment of structure, systems and resources in an attempt to enhance efficiency and competitiveness. Nonetheless, it can be argued that strategy and structural redesign cannot be sufficient to restructure the company, and the human component is a crucial factor in the ultimate success and failure of the restructuring (Kotter, 2012). The statement is correct in acknowledging that the engagement, support and management of workers during restructuring are very essential because people are the ones who interpret, implement and continue with change.
ReplyDeleteThrough strategic human resource management (SHRM) lens, strategic restructuring requires business focus and employee abilities to be harmonized (Boxall and Purcell, 2016). HRM is the facilitator through ensuring open lines of communication, equity and competencies, which are critical in ensuring trust and morale are not lost in the process of change (Ulrich, Brockbank and Johnson, 2009). As an example, resistance to change and uncertainty is countered through HR interventions like career counselling, redeployment and participatory communication in case of restructuring that results in job redesign or downsizing (Armenakis and Harris, 2009). In the absence of them, restructuring may create anxiety, reduced productivity and voluntary turnover that will weaken the strategic goals.
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ReplyDeleteRestructuring doing a critical role in HRM as it helps company & organization adapt to changing business environment & improve efficiency. You have mention about tactfully.
DeleteThe Human Resource Management (HRM) function plays a vital role in ensuring the success of organizational restructuring by managing change effectively, maintaining employee morale, and aligning the workforce with new strategic goals. HRM facilitates clear communication, provides training and development to help employees adapt to new roles, and ensures fair treatment throughout the transition. By fostering trust and engagement, HRM helps minimize resistance and supports a smooth transformation process that contributes to long-term organizational success.
ReplyDeleteEffective HRM plays a crucial role in successful organizational restructuring. By managing change, supporting employees, and aligning talent with new goals, HR ensures a smooth transition and strengthens the organization’s long-term stability.
ReplyDeleteYou explain the role of HRM in restructuring very clearly, and I like how you use the CEB example to show real challenges and HR’s responsibilities in practice. You make the link between strategy, communication, and people very strong. One thing you could strengthen is adding a short point on how HR can measure the success of restructuring, since you already discuss its impact. Overall, you present a well-organized and meaningful analysis that shows why HR’s role is essential in large-scale change.
ReplyDeleteYour use of the CEB case brings clarity to how HR must operate beyond paperwork during large-scale restructuring. I appreciate the focus on strategic communication, talent mapping, and fair redeployment; these are practical levers HR can use to preserve trust and continuity. To strengthen the piece, consider adding measurable indicators (e.g., retention rates, employee engagement scores, grievance numbers) to show how HR can track restructuring success. A short paragraph on post-restructure integration—how to rebuild culture and leadership cohesion—would also make the argument more complete. Overall, a thoughtful and timely piece.
ReplyDeleteOrganisational restructuring is truly vital for staying competitive, especially when technology and business needs keep shifting. Realigning roles and processes helps organisations adapt faster and work more efficiently.
ReplyDeleteHuman Resource Management (HRM) plays a critical role in ensuring the success of organizational restructuring. Effective HRM helps manage change by communicating clearly, supporting employees, and aligning talent with the new organizational structure. HR professionals facilitate reskilling, manage redeployments, and ensure fair and transparent processes throughout the transition. They also help maintain morale, reduce resistance, and build trust by addressing employee concerns. By strategically managing people, HRM ensures that the restructuring not only achieves operational goals but also preserves employee commitment, minimizes disruptions, and strengthens the organization’s long-term stability and performance.
ReplyDeleteVery insightful! Organizational restructuring is indeed a critical strategy for adapting to changing business environments and staying competitive. I like how you highlighted the different drivers and approaches, from mergers and acquisitions to technological disruptions. Understanding restructuring as a proactive tool for efficiency and alignment, rather than just a reaction to challenges, is key for long-term organizational success. Great explanation!
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